Shipping carriers (e.g., common carriers, such as United Parcel Service, Inc. (UPS), FedEx, United States Postal Service (USPS), etc.) daily transport millions of packages over tens of thousands of routes to and from a variety of clients for a variety of different purposes. Generally, shipping carriers structure rates for the shipment of these packages on the basis of discrete and pre-defined geographical areas. Historically, geographical areas are defined with a granularity level the size of postal or zip codes. As a result, packages destined for a particular postal or zip code are assigned an identical rate structure.
Using conventional rate structuring systems, differing costs for each package destined for a particular postal or zip code do not influence the rate structure applied thereto. Instead, costs and profits are averaged across the postal or zip code. As a result, certain packages within the postal or zip code, namely those with a higher static cost of delivery, become less profitable, as compared to those packages having a lower static cost of delivery. namely those configured with rate structures associated with postal or zip codes defining geographical destination areas, all packages destined for a particular postal or zip code are assigned the same rate structure, regardless of differing costs associated with the delivery of individual packages within that postal or zip code. Differing profits margins also occur, on a package-level basis, due to the existing degree of granularity within conventional rate structuring systems. As a result, delivery of certain packages is more costly and/or less profitable for the shipping carrier than others, which is generally a less than desirable model.
Accordingly, a need exists to provide a rate structuring system that defines geographical destination areas with sufficient granularity so as to positively influence profitability on a package-level basis.